Mutual fund folios scale 22.5 Crore in December 2024

13 Jan 2025 , 02:07 PM

MUTUAL FUND FOLIOS CROSS 22.5 CRORE BARRIER

Between November and December 2024, the total number of mutual fund folios grew from 22.08 Crore folios to 22.50 Crore MF folios; an accretion of 1.90%. One must remember that these are folios or unique mutual fund accounts, and the actual unique investors in mutual funds mapped on PAN is about 5.3 crore. However, folios do measure retail intensity much more eloquently than AUM as they are not influenced by market cap shifts. Over the last 10 years, mutual fund folios have grown from 3.95 Crore to 22.50 Crore; an accretion of 5.7 times. However, fund managers still believe that mutual fund folios have just scratched the surface. More so, in a country with 112 Crore mobile connections, 75 Crore PAN, and 70 Crore bank accounts. Here is how folios grew in December 2024.

MF FOLIOS: MACRO PICTURE FOR DECEMBER 2024

Here is the macro picture of mutual fund folio growth for December 2024; across open-ended and close-ended funds?

Macro picture	Total Folios Dec-24	Total Folios Dec-23	Folio Growth
Open ended Funds	22,44,70,051	16,43,01,894	36.62%
Closed Ended and Interval Funds	5,33,494	5,88,378	-9.33%
Grand Total	22,50,03,545	16,48,90,272	36.46%

Data Source: AMFI

At a macro level, the total number of mutual fund folios as of December 2024 stood at 22.50 Crore; compared to 22.08 Crore folios in November, 21.65 Crore folios in October, 21.05 Crore folios in September, 20.45 Crore in August, and 19.84 Crore folios in July 2024. On a yoy basis, growth in total folios for December 2024 stood at 36.46%;  compared to 36.46% in November, 35.61% in October, 34.00% in September, 32.60% in August, and 31.03% in July 2024. The monthly traction has been building up in terms of overall folio growth.

ACTIVE DEBT FUND FOLIOS AGAIN CONTRACT IN DECEMBER 2024

Debt fund folios had been under pressure for last couple of years and that trend continues to persist. However, debt funds, being institutional products, rely less on folios. For December 2024, active debt fund folios contracted by -5.17%; compared to -5.10% in November, -2.51% in October, -3.24% in September, and -3.48% in August 2024. The fall has become sharper in the last 2 months.

Active Debt Funds	Total Folios Dec-24	Total Folios Dec-23	Folio Growth
Long Duration Fund	88,502	47,045	88.12%
Gilt Fund	2,08,995	1,79,247	16.60%
Liquid Fund	18,50,191	17,85,882	3.60%
Dynamic Bond Fund	2,23,158	2,21,633	0.69%
Ultra Short Duration Fund	6,44,835	6,40,611	0.66%
Medium to Long Duration Fund	1,02,398	1,02,463	-0.06%
Money Market Fund	4,29,600	4,39,156	-2.18%
Short Duration Fund	4,42,755	4,72,416	-6.28%
Gilt Fund 10-Y constant duration	35,849	39,170	-8.48%
Low Duration Fund	8,20,804	8,97,877	-8.58%
Corporate Bond Fund	5,29,188	5,84,740	-9.50%
Floater Fund	1,98,785	2,22,744	-10.76%
Banking and PSU Fund	2,37,444	2,66,424	-10.88%
Medium Duration Fund	2,12,130	2,38,510	-11.06%
Credit Risk Fund	1,84,077	2,17,942	-15.54%
Overnight Fund	6,15,458	8,40,161	-26.75%
Sub Total – Active Debt Funds	68,24,169	71,96,021	-5.17%

Data Source: AMFI

Out of the 16 categories of debt funds, only 5 categories showed positive growth in folios, with 2 categories (Dynamic Bond Funds and Ultra Short Duration Funds) growing less than 1%. The leader in terms of folio growth was, once again, Long Duration Funds at 88.12% yoy, followed by gilt funds at 16.60%. A total of 5 active debt funds saw double-digit contraction in folios yoy. This included overnight funds, credit risk funds, medium duration funds, banking & PSU funds, and floater funds. The bias was towards folio contraction.

ACTIVE EQUITY FUNDS ADD 4.45 CRORE FOLIOS YOY IN DEC-24

In December 2024, active equity funds added 4.45 Crore folios compared to 4.36 Crore in November 2023. For active equity funds, the yoy folio expansion for December 2024 stood at 39.4%; compared to 39.5% in November, 38.9% in October, 37.7% in September, 36.4% in August, and 35.0% in July 2024. Folio additions in active equity funds emanate largely from SIP flows and NFOs.

Active Equity Funds	Total Folios Dec-24	Total Folios Dec-23	Folio Growth
Sectoral/Thematic Funds	2,98,48,837	1,54,15,537	93.63%
Multi Cap Fund	88,58,996	52,95,021	67.31%
Mid Cap Fund	1,97,29,172	1,28,57,604	53.44%
Dividend Yield Fund	11,71,677	8,15,925	43.60%
Small Cap Fund	2,40,35,920	1,69,19,143	42.06%
Value Fund/Contra Fund	79,99,203	56,42,727	41.76%
Large & Mid Cap Fund	1,13,29,719	86,78,915	30.54%
Flexi Cap Fund	1,69,94,903	1,35,05,690	25.84%
Large Cap Fund	1,55,29,618	1,32,01,818	17.63%
ELSS	1,68,39,209	1,55,63,623	8.20%
Focused Fund	51,59,573	50,96,592	1.24%
Sub Total – Active Equity Funds	15,74,96,827	11,29,92,595	39.39%

Data Source: AMFI

In December 2024, all the 11 active equity fund categories witnessed accretion in folios. The big boost to folio accretion in equity funds has come from sectoral funds, multi-cap funds, mid-cap funds, dividend yield funds, and small cap funds. A total of 6 equity categories saw yoy folio accretion of more than 40%. This list includes sectoral funds, multi-cap funds, mid-cap funds, dividend yield funds, small cap funds, and value funds. Alpha hunting appears to be back in vogue in December 2024.

HYBRID FUNDS – CHUGGING ALONG STEADILY

All the 7 Hybrid and solution funds have shown yoy growth. Multi-asset allocation funds leads the pecking order, but other allocation funds are seeing traction too.

Hybrid / Solution Funds	Total Folios Dec-24	Total Folios Dec-23	Folio Growth
Multi Asset Allocation Fund	28,46,417	15,81,885	79.94%
Arbitrage Fund	5,73,073	4,67,679	22.54%
Equity Savings Fund	4,70,610	3,87,874	21.33%
Dynamic Asset Allocation/BAF	50,55,258	44,52,194	13.55%
Balanced Hybrid Fund	57,06,104	53,53,979	6.58%
Retirement Fund	29,82,418	28,38,369	5.08%
Children’s Fund	30,49,707	29,63,599	2.91%
Conservative Hybrid Fund	5,46,180	5,32,127	2.64%
Sub Total – Hybrid Funds	2,12,29,767	1,85,77,706	14.28%

Data Source: AMFI

All 8 categories of hybrid funds (including solution funds) saw folio expansion in December 2024; with 4 out of these 8 reporting double-digit folio growth. The best folio growth was once again in multi asset allocation funds at 79.94%, followed by Arbitrage funds at 22.54%, Equity Savings Funds at 21.33%, and Balanced Advantage Funds (BAFs) at 13.55%. Allocation funds are the flavour among hybrids. For hybrid category funds overall, number of folios grew 14.28% in December; compared to 14.31% in November, 14.0% in October, 13.5% in September, 13.8% in August, and 12.2% in July 2024. There appears to be a clear shift in retail demand towards diversified asset allocation.

PASSIVE FUNDS ADD 1.34 CRORE FOLIOS YOY IN DEC-24

Here, the passive category includes equity and debt related index products (index funds and ETFs), gold ETFs, silver ETFs, and international (FOFs).

Passive Funds	Total Folios Dec-24	Total Folios Dec-23	Folio Growth
Index Funds	1,25,45,582	62,83,447	99.66%
Other ETFs	1,85,96,766	1,28,23,860	45.02%
GOLD ETF	64,05,088	49,11,226	30.42%
Fund of funds investing overseas	13,71,852	15,17,039	-9.57%
Sub Total – Passive Funds	3,89,19,288	2,55,35,572	52.41%

Data Source: AMFI

For the fourth month in a row, international fund of funds (FOF) saw yoy contraction in folios in December 2024 too. This can be attributed to global uncertainty and regulatory restrictions. The growth in passive fund folios yoy is the highest among all categories at 52.41%. Index funds dominated folio growth at 99.66%, followed by index ETFs at 45.02%, and gold ETFs at 30.42% in December 2024. Passive fund folio growth in December 2024 stood at 52.4%; compared to 52.4% in November, 49.7% in October, 45.7% in September, 42.6% in August, and 38.9% in July 2024. While passive funds are seeing some traction in NFOs, what is missing is the surge in passive flows that we saw about 2 years back. Hopefully, as alpha gains narrow, passives should make a comeback!